Since the middle of 2017, oil prices have risen due to strong growth in global demand, compliance with OPEC agreements, upward trend in the Middle East, unplanned supply cuts in Angola, a steep drop in Venezuelan consumption and a downtrend. The US nuclear agreement agreement announced in the latest report by the EC.
Recently, Brent prices have reached $ 80 per barrel, and OPEC manufacturers have agreed that they will not increase production speed soon. Severe weather conditions caused the deterioration of production in the Gulf of Mexico. But at the same time, the United States still cannot pull the oil crane when it needs a global economy.
Only Saudi Arabia, the United Arab Emirates, Kuwait (OPEC) and Russia have sufficient production capacity to compensate for the lack of long-term supply cuts. Questions about the sustainability of the US chime explosion also helped maintain high prices.
Rising oil prices have also affected globally rising gas prices in the last six months. However, the relationship between oil and natural gas prices in Europe has declined due to a significant deviation from oil indexing and hub prices: The share of oil indexing pricing fell from 78% in 2005 to 28% in 2017.
Who benefits from higher oil prices and who loses?
While a barrel will continue to recover oil prices above $ 70, it will benefit most from traditional oil exporters, where higher prices are associated with higher export revenues and improved current account balances and financial resources. Higher prices will be supported by US oil producers.
On the contrary, higher oil prices are expected to be negative for the rest of the world (oil importers). In general, higher prices mean higher inflation, which reduces real disposable incomes for households and consumption and brings higher production costs to the energy-intensive sectors of the economy. The impact of prices varies significantly depending on the energy efficiency of economies.
In some sensitive oil importing countries, the devaluation of money against the dollar strengthens its effect and further increases its deficits. This is an example of India and South Africa and to some extent Indonesia and the Philippines.
Oil prices forecasts
Rising prices are expected to be silenced by increasing demand in Canada and the United States and slowing economic growth globally.
Significant uncertainties and possible price fluctuations, Iran's contraction in crude oil is related to the volatility of Saudi Arabia's production of Libya and Venezuela, as well as its willingness and ability to compensate for the level of oil demand in a commercial war. decline in the growth of emerging economies.
The impact of rising oil prices in the euro area
As a net oil importer, the macroeconomic impact of high oil prices on the euro zone is negative. The cost of the industry, which uses oil as raw material, will increase and subsequent inflation will affect consumers negatively.
According to EC accounts, a cumulative increase of 20% in the price of Brent oil was around 0.1 percentage points in 2019, an increase of 0.2% in the euro zone GDP and 2020. expected to adversely affect.